Southern Queensland grain prices weathered last week's global selling tsunami reasonably well, with farmers viewing it as an opportunity to extend coverage.
Global grain markets were pummelled as speculative investors turned aggressive sellers, sending United States wheat futures back to levels before Russia invaded Ukraine in late February. Few grain markets were spared from the selling onslaught. US wheat futures tumbled 10 to 11 per cent for the week. Corn ended the week 9pc lower while soybeans slipped 6pc.
Canola was pummelled with Canadian futures slumping by 16pc for the week. Similar declines were seen in European markets.
Reasons for the washout in global grain markets were varied. Seasonal harvest pressure was a feature. Winter wheat harvesting is under way in the US, Europe and the Black Sea which will help ease global supply concerns. Analysts are saying it's unlikely to fully address the global wheat supply shortfalls brought on by the war in Ukraine.
Improving weather in the US also pressured corn and soybean futures after much-needed rain and cooler weather reached the Midwest.
Nervousness about the global economic outlook was also evident. Investors are becoming increasingly concerned that rising interest rates could plunge the world into a recession for the first time since 2009 and that global demand could suffer.
Local markets came under pressure as buyers adjusted as global values tumbled, although there were significant regional variations.
Weakness in the global markets had limited impact on the southern Queensland and northern NSW grain prices. SFW wheat was steady at $470 delivered Downs and barley at $460. Sorghum was little changed at $385 delivered into the Darling Downs.
Elsewhere, buying ideas were sharply lower. Values into Melbourne and the broader south-eastern Australia fell by $20 to $30 for the week. Similar declines were seen in SA and WA.
New crop wheat, barley and canola prices were sharply lower in all states and were broadly reflective of the declines seen in global markets. New crop APW bids fell by 8-10pc, or $35-40 a tonne. Barley was down $10-20/t. New season's canola bids fell by more than $100/t, in line with sharp declines in Canada and Europe.
Favourable weather is maintaining the outlook for another big Australian winter crop harvest. Improved rain has benefited crops in WA and SA while eastern Australia has benefited from the drier weather in June.
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